Car purchase financing: product features
For most Italians, the car is an indispensable element, however liquidity is not always available to deal with this expense. In these cases, auto financing is required. Normally, the customer can choose between two options: ask for credit through the dealer, or go to an autonomously selected bank or financial institution.
In the first case, the retailer, who has entered into an agreement with the lender, takes care of acting as an intermediary between the customer and the lender. If the institution approves the credit application, the sum is paid directly to the dealer.
In other words, the bank or financial company advances the money necessary to purchase the car on behalf of the customer, who undertakes to repay it through a monthly installment amortization plan. In the second case, on the other hand, it is the customer who makes direct agreements with the lender.
However, it should be noted that car loans are aimed not only at the purchase of a car, but also at that of other vehicles, such as motorcycles and campers.
New and used car financing: that’s what changes
In general, lenders apply different conditions depending on whether the vehicle purchased is new or used. The purchase of a used good is in fact perceived as a riskier operation, since statistically it presents a more frequent frequency of insolvencies by the debtors.
In these cases, the lender can decide to protect itself by applying more restrictive conditions to the loan both in terms of price (with higher interest rates than loans for new cars) and maximum duration of the loan. Some financial companies also apply limits to the age of the vehicle.
Car financing: the best offers of the moment
As regards the protection of the lender, the presence of collateral is generally not required, such as lien or mortgage on proprietary assets. However, if the client’s income is not sufficient to cover the repayment of the credit, the bank or financial institution may request the submission of additional guarantees, such as the signature of a guarantor or the change of the loan.
But what are the best auto finance deals on the market? By doing a little research on Spin Lender, a well-known online comparison site for a 10,000 USD car loan to be repaid in 4 years.
The budget provides for a monthly installment of 235.31 USD with a tan of 6.10% and a taeg equal to 6.39%. In second place we find Cream Consumer Bank with a tan of 6.10%, a taeg of 6.42% and an installment of 235.31 USD.